(Chinese Version)

Flipagram’s CEO and co-founder Farhad Mohi and TouTiao’s founder Zhang Yiming

TouTiao announced on January 2nd that the company has acquired overseas short-video company Flipagram. Flipagram is now valued at around $8 billion and will serve as a standing point for TouTiao to go international.

TMTPost learned that the acquisition was completed during the Spring Festival. However, TouTiao and Flipagram haven’t revealed any detail financial information of the deal. What makes this move interesting is Flipagram itself.

Flipagram’s description on App Store shows that the app was developed in Los Angeles and and allows users to edit short videos with background music and photos and upload them. Flipagram call their users’ contents stories. The company’s statistics show Flipagram already boasts 200 million users and these users have created 500 million video stories for the platform.

Flipagram, born in Los Angeles

TouTiao’s CEO Zhang Yiming commented on the acquisition:

“TouTiao has always been adopting technologies that boost the communication efficiency. Hopefully, TouTiao’s technologies can bring something new to Flipagram.”

After the acquisition, TouTiao will be helping Flipagram optimize its recommendation engine to improve the distribution efficiency. Meanwhile, Flipagram’s video content will appear on TouTiao’s overseas products to increase the distribution. It’s apparent that TouTiao is aiming to expand its content source through this move.

Of course, TouTiao also harvested Flipagram’s video product and operation team from the acquisition. It will help TouTiao better attract data flow with its overseas products.

This is the first overseas acquisition for TouTiao this year. Last year on October 15th, TouTiao invested strategically in Dailyhunt. Dailyhunt is India’s largest information platform. It posts 35,000 contents daily, covering news, e books, magazines, comics, videos etc. Dailyhunt enjoys a monthly view rate of 4.5 billion.

In November last year, TouTiao’s founder Zhang Yiming already revealed parts of the company’s internationalization strategies on the 3rd World Internet Conference. “Internationalization will be one of TouTiao’s core strategies in 2017,” he said.

TouTiao originally began its internationalization process in June 2016, Zhang said. “The company will expand to overseas through build&buy method, and currently has some activities in Japan, India, Southeast Asia, North America and Brazil,” he explained. TMTPost found that TouTiao has amassed 10 million users in Japan, Southeast Asia and North America. This is the part that Zhang Yiming call Build.

Last year in late Septembre, Uber China’s senior executive Liu Zhen announced that she wishes to build TouTiao as a global Internet company when joining TouTiao. Industry insiders therefore estimate she would be directing TouTiao’s internationalization business and strategy.

In January 2016, TouTiao teamed up with Caixin to establish Globus, an information platform that gathers and shows international news and categorizes them according to countries and regions. TouTiao holds 30% of the joint venture’s stocks. Open data shows Globus mainly offer services to ten main countries including America, UK, France and Japan etc., covering 200 main cities around the globe. The global report framework of the platform is based on Caixin. Chinese experts, we media and service organizations will be pumping the information and consulting service for the platform.

Accelerating the internationalization in 2017 is surely meaningful for TouTiao given the current information aggregation market condition in China. Zhang Yiming had once expressed to media that the data flow dividend would eventually run out and therefore the global market would be the place to attract new users. In addition to that, the mobile Internet accelerated globalization, making information flow, migration, logistics, and capital flow movements more active and frequent. Thus the distribution cost is increasingly lowering.

“China’s Internet population only accounts for one fifth of the globe. If we can’t have a phenomenal product in the global market, we can’t really compete with the other fourth fifths with the one fifth. Going overseas is inevitable.”

Furthermore, it’s worth noticing that as an emerging Internet company in China, TouTiao doesn’t have much moves in terms of investment acquisition.

According to open data, TouTiao invested in Chen Anni’s Kuaikanmanhua, photography community Tuchong, and acquired popular image base DFIC. The company had alsi invested in Dailyhunt and this time Flipagram.

Looking from the investment layout, TouTiao’s investment fields include information platform and image platform. This time the acquisition of Flipagram makes up the video gap.

From Zhang Yiming’s view, short video is the next big thing which content entrepreneurs will focus on. Last year, Zhang Yiming gave out ￥1 billion to subsidize short video creators. Zhang Yiming’s so-called content entrepreneurship is not only hot in China, but is also gaining momentum in the international market.

However, TouTiao also faces competitions such as Tencent’s Kuaibao, and UC Toutiao etc. As TouTiao moves into the international market, its rivals are heading out as well. In late December last year, Tencent fully acquired Thailand’s biggest web portal Sanook Online(in 2010 Tencent already acquired nearly half of the stocks). On January 22nd, Alibaba’s UC announced to pour in $30 million in Southeast Asia region to support we-media.

According to TouTiao’s statistics, TouTiao has 175 million monthly active users and the average user daily in-app time is 76 minutes by December 2016.

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[The article is published and edited with authorization from the author @Han Pei, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.